Division Over Housing Assistance Qualifiers

San Francisco voters who approved the housing "trust fund" last year were promised that money would, in part, help moderate-income residents - including emergency first responders - buy homes in the city.

But in a city where the median price of a home topped $1 million this year, what that means is up for debate.

A divide has appeared as city officials and housing advocates negotiate exactly which first responders will qualify for the first round of down payment assistance loans under Proposition C.

Supervisor Mark Farrell, who pushed for the loan assistance program to be included in Prop. C, wants the loans the first year to go only to fire, police and sheriff's officials. He initially proposed that workers who make up to 250 percent of the area median income - or up to $250,000 for a family of four - be eligible.

Housing advocates and Supervisor John Avalos, however, say that nurses and other hospital workers should also qualify as first responders, that the maximum income level should be lowered and that there should be other limitations - such as a requirement that a person be buying their first home and that the house not be too expensive.

The mayor's Office of Housing, which is charged with administering the program, is expected to announce the program's parameters by the end of the month. But it's not locked in forever, officials said.

"Voters voted for a first responders program, and we want one that works," said Olson Lee, the office's director. "A lot of people are sweating the details, and they should ... but we are committed to adjusting the program if it needs to be adjusted."

Setting a precedent

Advocates for lower income housing are worried that too high of an income limit the first year could set a bad precedent.

"Low and moderate income was the basic framework of Prop. C," said Avalos. "And 250 percent is not moderate income. You can be a firefighter and be moderate income, but that's not 250 percent. ... This should be a subsidy, not to help people accumulate great wealth and real estate."

Farrell argues that it's unrealistic to lower the maximum income level too much, in part because firefighters' pay has been inflated by forced overtime in the understaffed department. According to the city controller, rank-and-file firefighters took home an average of $130,000 in 2012 - about $30,000 of it overtime. Police officers made an average of $110,000 last year, $9,000 of it overtime.

Because the first year is a pilot program and limited funds are available, Farrell said, the first year of assistance should be limited to public safety officers.

"Over 50 percent of our principal public safety departments' officers live outside city limits," he said. "There has to be a shift in the mind-set - prior programs for down payment assistance have targeted only low-income individuals and this is designed to focus on vocations. ... San Francisco is an incredibly expensive place to live."

The mayor's Office of Housing will dedicate $20 million to housing assistance in the 2013-14 fiscal year and up to $50 million a year by 2024. About $2 million of the funds this first year are earmarked for down payment loan assistance; half of it for first responders and the other half for low- to moderate-income home buyers, though Lee said those amounts could fluctuate.

Part of program running:

The program for non-first responders is already up and running, and has an income cap of 120 percent of area median income, or $121,450 for a family of four; the house must be a single-family residence and cannot be priced at more than $673,625. Residents can find out more about that program at www.sf-moh.org.

Housing advocates including Myrna Melgar, deputy director at the Mission Economic Development Agency, argue that the maximum income level for first responders should be lowered to around 200 percent of area median income, or around $200,000 for a family of four.

People close to the talks said that limit is likely, though conversations are still under way. Other issues raised by Melgar and others include whether there should be a purchase price limit and a requirement that a household does not own another home elsewhere when they apply for the loan - or at least be selling their other home.

"Down payment loan assistance is supposed to be for your first home ... this is more for younger, newer recruits," said Avalos. "I think if you have equity already, it shouldn't really be applied that way. It's really about first-time home buyers; the program doesn't have unlimited funds. And there should be some cap linked to income - it shouldn't subsidize luxury homes."

But Tom O'Connor, president of the city's firefighters union, said that up to 61 percent of the union's members live outside the city and that "given a choice, 90 percent would want to stay in San Francisco." He said the program should not exclude managers and more senior firefighters.

As many as possible:

"We don't want to limit it to first-time home buyers because if they bought elsewhere, they may want to come back," he said, adding that it would also be unfair to disqualify workers because of overtime pay that will likely dry up in the coming years as the city hires more firefighters. "We are trying to get as many people included as possible," he said. "We want to make sure we have public safety workers living in San Francisco in the event of an emergency."

That's one thing everyone agrees on: It's good policy to have first responders living within city limits.

"You want to have people who serve the city in a time of emergency close by, so they are not crossing a bridge or taking a ferry," said Avalos.

Need more help? Meet one-on-one with a housing counselor to discuss your rental or purchasing goals and get application assistance. Interpretation services will be provided. Email info@homeownershipsf.org to schedule an appointment.